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NYC judge sentences defendants in payroll tech scandal to 20 years, calling it 'tale of greed'

NEW YORK, N.Y. - Sentencing three men to prison for 20 years, a judge urged New York City officials to make substantial reforms Monday to prevent the kind of historic fraud over its project to modernize its payroll systems.

"It is a classic tale of greed and corruption," U.S. District Judge George B. Daniels said as he sentenced Mark Mazer, Gerard Denault and Dimitry Aronshtein following their November convictions.

Daniels ordered the men, previously subject to house detention, immediately taken into custody by U.S. marshals as dozens of family members and friends who had crowded a Manhattan courtroom for a lengthy sentencing hearing waved goodbye.

Daniels faulted the city for a fraud that Assistant U.S. Attorney Howard Master said was among the biggest in New York City's history.

"The city did little to prevent their brazen scheme," the judge said. "The process is in need of substantial reform."

A jury convicted the men of key roles in the corruption of the city's CityTime information technology project. The project was meant to modernize the city's timekeeping and payroll systems across city agencies.

Besides serving prison terms, Mazer, 50, of Manhasset, Aronshtein, 53, of Oceanside and Denault, 52, of Danbury, Conn., were ordered to forfeit $47 million.

Defence lawyers promised to appeal.

Attorney Barry A. Bohrer, representing Denault, told the judge after the sentence was announced that it was "vastly disappointing to us."

Only Aronshtein spoke at sentencing, saying: "My life is ruined. ... I feel like the biggest loser in the world."

Prosecutors said the men stole tens of millions of dollars as the cost of the project ballooned from $73 million in 2000 to more than $620 million by the time the defendants were arrested in December 2010.

To avoid prosecution, the project's prime contractor — Science Applications International Corp. or SAIC — paid more than $500 million in restitution and penalties.

"Today's sentences punctuate an epic scheme by Mark Mazer, Gerard Denault, Dimitry Aronshtein and others to steal millions of dollars through kickbacks and fraud from the City of New York, and then squirrel away the proceeds," U.S. Attorney Preet Bharara said.

He called it "one of the largest and most brazen frauds ever committed against the city."

New York City Department of Investigation Commissioner Mark G. Peters said the sentencing "shows these one-time city vendors for what they are: common crooks who pocketed public funds."

Daniels said the prison terms were earned, citing the defendants' lack of remorse, lack of acceptance of responsibility and obstruction of justice.

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